Cristiano Ronaldo confronts a $1 billion legal action concerning Binance advertisements

Footballer Cristiano Ronaldo is being sued in a class action lawsuit in the US for his promotion of Binance, the world's largest cryptocurrency exchange. The plaintiffs claim that Ronaldo's endorsement led them to make investments that resulted in financial losses. They are seeking damages exceeding $1 billion. The BBC has reached out to Ronaldo's management company and Binance for their comments on the matter. In November 2022, Binance announced its first "CR7" collection of non-fungible tokens (NFTs) in collaboration with Ronaldo. The footballer stated that these NFTs would reward his fans for their years of support. NFTs are virtual assets that exist only digitally and are used to establish ownership of items like pictures or videos online. The "CR7" branding is derived from Ronaldo's initials and shirt number and is used across various products, from footwear to fragrances, which have contributed to his immense wealth. Ronaldo expressed in a social media video that the partnership with Binance would revolutionize the NFT game and elevate football to a new level. The cheapest NFT from the collection was initially priced at $77 but dropped to around $1 a year later, according to the claimants. They assert that Ronaldo's promotion of Binance resulted in a significant increase in searches for the crypto exchange, as well as individuals investing in what they refer to as "unregistered securities," such as Binance's BNB cryptocurrency. The US Securities and Exchanges Commission (SEC) considers these assets to be securities, meaning that celebrities endorsing them must comply with US law. SEC Chair Gary Gensler has emphasized the importance of celebrities disclosing the amount they are paid to promote investment in securities. The claimants argue that Ronaldo should have disclosed his earnings but failed to do so. Nigel Green, the CEO of consultancy firm DeVere Group, highlights that the issues with this case extend beyond Ronaldo, implicating global regulators who have been slow in establishing clear guidelines for this evolving financial landscape. Ronaldo and Binance seem to have future plans to collaborate, as confirmed by a recent social media post from the footballer. Neither Ronaldo nor Binance has responded to the BBC's requests for comment. The class action lawsuit was filed shortly after the US Justice Department instructed Binance to pay $4.3 billion in penalties and forfeitures. The department accused Binance of aiding users in evading worldwide sanctions and facilitating money laundering for criminals and terrorists. Binance's CEO, Changpeng Zhao, has resigned from the company after admitting to money laundering violations. In addition to Ronaldo, Major League Baseball, Formula 1, and Mercedes-Benz are all facing class action lawsuits filed on the same day for their promotion of failed crypto exchange FTX.